Corning Sees $20B Run Rate Early as Verizon Deal Fuels Data-Center Growth

Corning expects to reach a $20 billion annualized sales run rate in the third quarter, earlier than planned, with high-teens year-over-year growth expected to continue into the fourth quarter and next year. A new multi-year, multibillion-dollar Verizon agreement, along with deals with Lumen and Zayo, strengthens Corning’s data-center connectivity outlook and could accelerate its targeted $1 billion annual data-center interconnect opportunity. Strong optical communications demand is driving capacity investments, while improving solar conditions and higher-value products support profitability; Corning expects operating margins to remain above 20% and free cash flow to grow.

Corning NYSE: GLW executives said demand in optical communications, solar and selected glass applications is supporting momentum behind the company’s long-term “Springboard” growth plan, while new customer agreements are improving visibility into data-center connectivity demand. Speaking at Citi’s TMT Conference, Executive Vice President and Chief Financial Officer Ed Schlesinger said Corning expects to reach a $20 billion annualized sales run rate in the third quarter, earlier than previously anticipated. Based on the company’s July outlook, Schlesinger said this implies third-quarter sales should be at the high end of, or slightly above, prior guidance.

“The third quarter is running really well, and we expect the fourth quarter to be bigger than the third quarter,” Schlesinger said. He added that Corning expects its high-teens year-over-year growth rate to continue into the fourth quarter and next year.

Schlesinger highlighted Corning’s recently announced multi-year, multi-billion-dollar agreement with Verizon to support the telecommunications company’s long-haul network buildout for broadband and data-center interconnect applications. Corning has had a supplier relationship with Verizon for 30 years, he said.

The agreement follows previously announced arrangements with Lumen and Zayo. Schlesinger said those deals have led Corning to conclude it will achieve its previously stated goal of generating a $1 billion annual data-center interconnect opportunity sooner than the end of the decade, and that the opportunity could be larger. Corning’s Springboard plan calls for annualized sales of $20 billion by the end of the current year, $30 billion by the end of 2028 and $40 billion by the end of 2030. While Schlesinger said the company was not increasing its $30 billion or $40 billion targets at the conference, the new customer agreements provide greater confidence in its ability to reach them.

In optical communications, Schlesinger said enterprise and AI data-center demand remains strong, with orders rising and customers signing long-term agreements. Some customers are also providing cash to support capacity expansions and reserve production, he said. Schlesinger said current growth is being driven primarily by “scale-out” network needs, including larger data centers, additional GPUs and the fiber needed to connect them. Larger cluster sizes can add another layer to networks and increase fiber requirements, he said. Longer term, Corning sees a larger opportunity from optical technologies used inside servers and switches, as optics potentially replace copper connections. The company is planning for a $10 billion business by the end of the decade selling into near-packaged optics and co-pac...